USD/CAD rebounds as corrective structure develops

Gregor Horvat Wavetraders

USD/CAD is reversing quite sharply to the upside at the start of January, but let’s not forget that this can still be early-year flows, which are often reversed. Despite this bounce, the move still looks corrective, but it's ideally now forming a sideways bearish ABCDE triangle pattern in wave (B) before a continuation lower within wave (C) on a daily chart. In the 4-hour chart, we are tracking wave C that can be made in three legs abc, and it can revisit the upper side of a triangle range near 1.4000 resistance level before we will see a new slowdown within wave D. After the recent sharp and impulsive leg up into subwave "a", it can be now making a corrective setback in subwave "b", which can retest 1.3815 - 1.3745 support zone before a bigger recovery within subwave "c" of C occurs.

Big picture

On higher-degree charts we see pair completed five wave rise so now its time for consolidation, with room for more downside in first half of 2026.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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